Chapter 2 Business and IS/IT Strategic Planning Concepts

Agenda Business strategic planning model The strategic framework The Business and Product Life Cycle Product portfolios Generic business strategies

Business Strategic Planning Model By Gluck, Kaufmann and Walleck Four phases –Financial planning (meet the budget) –Forecast-based planning (predict future) –Externally oriented planning (think strategically) –Strategic management (create future)

The Strategic Framework Three layers –The external environment –Pressure groups and stakeholders –Internal business planning

The External Environment Economy Society Politics Legal Ecology Technology

Pressure Groups and Stakeholders Pressure group makes demands of the enterprise Stakeholders have a direct financial interest in the enterprise

Internal Business Planning - I Set objectives Current situation analysis –Strengths, weaknesses, opportunities, and threats, (SWOT) –Organization structure, resources, assets, R&D, sales and market, products, and competition Future strategies –Risk analysis in terms of SWOT –Offensive or defensive –Feasibility analysis in terms of abilities, resources, processes, and culture

Internal Business Planning - II Implementation –Monitoring and control in terms of objectives

The Business and Product Life Cycle By Higgins (1985) Emerging Growth Mature Declining

Product Portfolios By Boston Consulting Group Wild cat product (low market share in a high growth market) Star product (strong market position in an attractive or high growth market) Cash cow product (strong market position in a mature lower growth market) Dog product (weak position in a low growth or declining market)

Generic Business Strategies Overall cost leadership Differentiation Focus (niche market)

Questions How can an IS/IT affect the nature and value of the product or service and its life cycle? How can an IS/IT affect the market for products and services? How can IS/IT affect the cost of products and services?

Points to Remember Business strategic planning model The strategic framework The Business and Product Life Cycle Product portfolios Generic business strategies